N N SESHADRINATHAN Vs. STATE OF MADRAS

JUDGEMENT

(1.) THIS matter was referred to Full Bench as, in the opinion of the Division Bench, an important question of law relating to the interpretation of Section 9 (2) (a) (iii) of the Madras Agricultural Income-tax Act was involved.

(2.) THE facts giving rise to this reference lie within a short compass and may be stated as follows. The assessee and his minor son constituted a joint Hindu family in the year 1959. On 29-11-1959 the assessee settled on his wife an extent of 26 acres and 62 cents of land belonging to himself and his minor son out of a total extent of 281 acres and 51 cents. Four months later there was a partition of the property between the assessee and his son. For the assessment year 1961-62 the assessee submitted a composition application to the concerned Income-tax Officer in which he sought to exclude the property that was settled on his wife in november 1959. At the same time his wife filed another composition application in regard to the property that was given to her under the settlement deed. The income-tax Officer thought that the property gifted to the wife should be excluded (sic-included) in the composition application of the assessee as it was liable to be taxed under Section 9 (2) (a) (iii) of the Act. Aggrieved by this order the assessee carried a revision to the Income-tax Commissioner under Section 34 of the Act, contenting that the property which was the subject-matter of a gift in November 1959, was outside the scope of Section 9 (2) (a) (iii) of the Act in that it was not a gift by an individual to his wife but a gift by a joint Hindu Family to a female member thereof. This contention did not appeal to the Income-tax Commissioner with the result that he declined to interfere with the order under revision. The present revision petition was filed by the assessee under Section 54 of the Act.

(3.) A preliminary objection is raised by the learned Government Pleader that this revision is incompetent in that it is not attracted by Section 54 of the Act. It is urged by the learned Government Pleader that it is only an order that is otherwise prejudicial to the assessee that is contemplated by Sec. 54, and, this order not answering that description, is outside the ambit of that section. Since the answer to the preliminary objection raised by the Government Pleader turns upon Section 54 of the Act, we will do well to read it here: